I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Friday, October 16, 2009

Another Look at the VIX

So obviously the VIX did not bottom two days ago when I was looking at it last. Here is another count.

Pros: Channels well. Nice clear 3rd wave extension
Cons: The 5th wave is very truncated (however it is very similar to the length of the 1st wave)

The VIX may have bottomed, or it may not. However it did make a double bottom at 21.5 and we see some strong positive divergence on the hourly indicators.

Given this information and coupled with how weak the last wave was in the markets (based on indicators, momentum and internals) and how the sell-off is beginning to shape up, the bearish case (at least for the short term) is looking very compelling.

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